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Retirement planning officials wasted little time in objecting to the $3.8 trillion deficit reduction draft report that was released Wednesday by the chairs of the bipartisan National Commission on Fiscal Responsibility and Reform.

The two chairmen of President Barack Obama’s Deficit Reduction Commission—Erskine Bowles, former chief of staff to Bill Clinton, and Alan Simpson, a former Republican Senator from Wyoming--proposed a plan that would cut Social Security and Medicare, reduce income tax rates, get rid of the mortgage-interest deduction, and abolish the Alternative Minimum Tax (AMT). The proposal must secure the votes of 14 of the 18-member, bipartisan deficit reduction committee. A final draft is due on Dec. 1.

Eric Kingson, co-chair of the Strengthen Social Security Campaign, calls the draft proposal “an equal opportunity disaster,” stating that it cuts benefits for today’s seniors and persons with disabilities. The draft proposal “cuts Social Security benefits for virtually every American alive today and yet to be born,” he said in a statement.

Commission leaders also want the Senate Finance and House Ways & Means Committees as well as Treasury to develop and enact comprehensive tax reform by the end of 2012. The report also proposes to reduce the deficit to 2.2% of GDP by 2015, exceeding Obama’s goal of 3% of GDP. Other areas that will be cut include defense spending, farm subsidies and healthcare costs, but the gas tax would be raised.

Measures in the proposal would not take effect until fiscal 2012, which David Kelly, chief market strategist for J.P. Morgan Asset Management, says that is “wise” as “the economy does not need a reduction in aggregate demand in the short run.” Overall, Kelly says, “there are a lot of great ideas in the proposal that if implemented would not only help strengthen our fiscal position but would also strengthen our economy and increase the value of financial assets.”

The bipartisan tax policy leaders told Shulman that the IRS should “take all steps necessary to plan for changes” to present law so that no additional taxpayers faced higher taxes in 2010 because of the AMT. “As the leaders of the congressional tax-writing committees, we want to assure you that

Congress is working on legislative relief,” they told Shulman. “We will work to craft the AMT provision so that, in the aggregate, not one additional taxpayer faces higher taxes in 2010 due to the onerous AMT. Such legislation will allow the personal credits against the AMT and the exemption amounts for 2010 to be set at $47,450 for individuals and $72,450 for married taxpayers filing jointly.”

As for other aspects of the deficit reduction proposal, retirement and pension professionals say they are “deeply concerned” about the proposal’s “Zero Option Plan,” which, according to Brian Graff, executive director and CEO of The American Society of Pension Professionals and Actuaries (ASPPA), “would decimate the savings rate by eliminating tax incentives for contributing to employer-sponsored retirement plans, such as 401(k) plans, likely triggering mass terminations of company retirement plans—directly impacting a worker’s ability to save for retirement.”

Kingson said the proposal “cuts benefits for today’s middle-aged and middle-income workers who have already sustained huge losses in their retirement savings due to loss of housing equity and 401(k)/IRA savings.” The proposal also “cuts benefits for the youngest workers by raising their retirement age to 68. And for today’s toddlers by raising theirs to 69!”

Nancy Leamond, executive vice president for AARP, says that AARP is “deeply concerned” that the deficit reduction proposal “would aim to reduce the deficit by shifting health care costs onto seniors in Medicare. Raising costs on the sick and the most economically vulnerable is both wrong and counter-productive policy.” Instead, she says, “we should be focused on efforts to lower costs throughout the health care system. Our members and millions of Americans who receive Social Security, Medicare and Medicaid are not only worried about the impact of potential cuts for themselves, but for the future health retirement for their children and grandchildren. Cuts to these programs may mean less security and a bleaker picture for them.”

Deficit Reduction Commission members Camp; Paul Ryan, R-Wis.; and Jeb Hensarling, R-Texas, issued a joint statement in which they called the proposal “provocative” and stated that while they have “concerns with some of their specifics, we commend the co-chairs for advancing the debate. We will continue to work toward solutions that help spur economic growth and restrain the explosive growth of government spending.”